The European Union, on Tuesday, published its Fifth Anti-Money Laundering Directive (Directive (EU) 2018/843) that strengthens the organization’s rules to detect and prevent illegal routes through which money is laundered in or out of the member nations. The directive amends the previous Directive (EU) 2015/849.

The organization also suggested that it is difficult to get rid of anonymity from the cryptocurrency system entirely.

The inclusion of service providers like digital exchanges and digital wallets could not help in removing anonymity from these currencies completely.

However, the organization has allowed the Financial Intelligence Units (FIUs) to access information from these providers and get details about the identity of the users if the need be.

The directive read:

“Such monitoring would provide a balanced and proportional approach, safeguarding technical advances and the high degree of transparency attained in the field of alternative finance and social entrepreneurship.”

The document also listed high-risk countries for money laundering identified by the European Commission, including Democratic People’s Republic of Korea, Afghanistan, Iran, Iraq, and Syria. Member states will have to use due-diligence and additional measures to verify the identity of all natural and legal persons involved in transactions with these countries.

The directive focused on terrorist-financing firms using virtual currencies. It also said that digital exchanges that help in turning fiat to crypto and vice versa are not currently under any obligation to identify suspicious activity on their respective platforms, however, it’s “essential” that this changes.

The directive stated:

“It is essential to extend the scope of Directive (EU) 2015/849 so as to include providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers [sic] For the purposes of anti-money laundering and countering the financing of terrorism (AML/CFT), competent authorities should be able, through obliged entities, to monitor the use of virtual currencies.”

It also stated that the possibility of voluntary self-declaration of users to designated authorities should be examined further.

After the publication of this directive, EU-member states have until January 2020 to compile national laws in accordance with the EU Directive.

New EU Directive Allows FIUs to Monitor Cryptocurrencies was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

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